Posts Tagged ‘Credit Access’

Across the Ocean, Things Are Much the Same

Saturday, May 9th, 2009
Global Similarities

Global Similarities

In earlier postings, I wrote of the possible appearance that the small business stimulus appears to involve substantial, undisclosed risk to the taxpayer and that the SBA loan program to emerge from the stimulus bill has limited benefit for small businesses. This appears to be a universal theme.

In the United Kingdom, the Treasury Select Committee, a group of politicians representing each of the political parties, produced a 121-page analysis of the collapse of the banking sector. The analysis relied on interviews with government ministers, including Treasury Minister Alistair Darling and bankers. Not surprisingly, the report was critical of the failure of regulators to prevent the collapse of the largest banks in the U.K. including Royal Bank of Scotland. The Committee also noted that they were “very concerned” about the lack of credit for small businesses that also faced higher charges and arrangement fees. Specifically, the report stated “We deplore the behavior of a number of those banks who have received so much public money and behaved in such an insensitive manner particularly to established customers”. The Committee demanded that banks that received had taxpayer funds provide more disclosure as to their loans to the small business sector.

The findings of the Treasury Select Committee contradicts a report published one week ago by the British Bankers’ Association which claimed that lending to small businesses rose 5%, or more than £270 million, year-on-year. The British Banking Association further stated that small business lending rose in each of the three months of the first quarter of 2009.

As small business owners, irrespective of where we are, we face similar issues in dealing with big businesses and with big government. In writing Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses, I tried to be a inclusive as possible, to serve the needs of a global small business audience, while also offering specific, actionable advice. There were fewer than five pages of the book in which I discussed information unique to an American audience; specifically, the programs of the U.S. Small Business Administration and the Federal Emergency Management Agency. But I had hoped that there, too, the information would have broad relevance as, while policy specifics may differ from country to country, the underlying risks inherent in dealing with government agencies are the same. I had hoped that readers outside the U.S. would also find the lessons helpful and applicable to their specific circumstances. I hope to see Prepared Small Business build a global network of resilient small businesses as we have much to learn from one another, whether in dealing with access to credit or other issues.